EXECUTION COPY EXCLUSIVE MASTER DISTRIBUTION AGREEMENT BETWEEN ARGISOLAR SOLUTIONS, INC. AND AGRI-TECHNOLOGIESLLC
EXECUTION COPY
EXCLUSIVE MASTER DISTRIBUTION AGREEMENT BETWEEN ARGISOLAR SOLUTIONS, INC. AND AGRI-TECHNOLOGIESLLC
THIS EXCLUSIVE MASTER DI STRIBUTION AGREEMENT (this "Agreement") is made as of the last date of signature ("Effective Date"), by and between ARGISOLAR SOLUTIONS, INC., a Colorado corporation and any of its China subsidiaries and/or affiliates (currently but not limited to Fuwaysun Technology (HK) Limited, Forboss Solar (ShenZhen) Co. Ltd. And Shenzhen Fuwaysun Technology Company Limited), having its principal office located at II75 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000 (hereinafter referred to as the "COMPANY''), and AGRI TECHNOLOGIES, LLC, having its principle office located at 0000 Xxxxxxx Xxxxxxx
00, Xxxxxxxx, XX 00000 (hereinafter referred to as the "DISTRJBUTOR"), collectively
the "Parties".
X. Distributor desires to be the exclusive Master distributor of any and all of the COMPANY's current or future agricultural products (the "Products"), in certain territories more fully described herein (the "Exclusive Territories"); and
B. The COMPANY desires to appoint DISTRIBUTOR as the Exclusive Master Distributor of the COMPANY's Products in the Exclusive Territories and will provide DISTRIBUTOR with Confidential Information regarding the products, pursuant to the protections afforded the COMPANY herein, in order for DISTRIBUTOR to distribute said Products in the Exclusive Territories.
l.
Recitals. The recitals as set forth above are incorporated herein and made a part of this Agreement.
2.
Exclusive Territories. The Exclusive Territories shall be all of North
America, Central America, the Caribbean Basin Countries, and South America.
3.
Appointment of Distributor and Exclusivity.
(a) The COMPANY hereby appoints the DISTRIBUTOR as its sole and exclusive master distributor of all the COMPANY's Products and future products within the Exclusive Territories. DISTRIBUTOR may nominate affiliated or other companies to sell and/or lease and distribute the Products in the Exclusive Territories ('Sub-Distributors"), provided however (i) such Sub-Distributors agree in writing to be bound by the terms of the Master Agreement and this Agreement,
(ii) DISTRTBUTOR shall be responsible for any breaches of the Master
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Agreement or this Agreement made by such Sub-Distributor in the same manner as if any such breach was made by DISTRIUTOR itself.
(b) DISTRIBUTOR shall purchase the Products directly from the COMPANY (or any agent or third party designated by the COMPANY in writing) in DISTRIBUTOR’s own name and for DISTRIBUTOR's own account and risk.
(c) DISTRIBUTOR may sell and/or lease the Products to third parties provided however, DISTRJBUTOR shall not sell and/or lease the Products to any third party that intends to market, sell or distribute the Products in China.
(d) DISTRIBUTOR shall not advertise and/or solicit sales of the Products to parties residing in China. In the event that the DISTRIBUTOR receives any response or inquiry from any party within China through its website or any other marketing and/or advertising materials distributed within the Exclusive Territories, the DISTRIBUTOR shall tum over all such contact information to the COMPANY.
(e) DISTRIBUTOR shall use commercially reasonable efforts in promoting the Products which shall include but not be limited to marketing and advertising the COMPANY's Products.
(t) The COMPANY shall direct and turn over any new requests for the Product or orders for the Product within the Exclusive Territories to the DISTRIBUTOR.
(g) Nothing in this Agreement shall constitute the right of the DISTRIBUTOR to act as agent for the COMPANY or to represent the COMPANY in any way whatsoever. The DISTRIBUTOR shall have no authority whatsoever to enter into any obligations on behalf of the COMPANY.
(h) DISTRIBUTOR acknowledges that proprietary information is embodied in the Products and all data, information and materials supplied by the COMPANY to the DISTRIBUTOR or acquired by the DISTRIBUTOR in performance of this Agreement. DISTRIBUTOR agrees not to use. appropriate or disclose to others any such proprietary information, except as may be expressly permitted in writing by the COMPANY. DISTRIBUTOR agrees that all proprietary rights relating to the Products, including all copyrights, patents and trade secrets and all trade names, trademarks and service marks used or promoted by the COMPANY, the DISTRIBUTOR or their respective agents with respect to the Products are the sole and exclusive property of the COMPANY.
(i)
The COMPANY understands and agrees DISTRIBUTOR shall enter into a similar distribution agreement with Xxxxx X. Xxxxxx, 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or an entity to be designated by Xxxxx
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X. Xxxxxx appointing him or the designated entity as the exclusive distributor in the exclusive territory of the State of Colorado. Notwithstanding anything contained herein to the contrary, said distribution agreement shall be executed as soon as practicable upon terms similar to this Agreement including provisions for no cost charged to be designated and appointed the exclusive distributor for the State of Colorado and contain no annual purchase minimums for purchase of the Products as required in Sections 7 and 8 of this Agreement.
4.
Purchase and Sa le of the COMPANY's Products
(a)The COMPANY shall sell Products to DISTRIBUTOR at a
price no greater than the lowest price plus 5% sold to anyone, anywhere, regardless of quantity. The purchase price of all Products sold to the Distributor shall be paid to the Company in Chinese RMB currency (“Chinese RMB”).
(b)
The COMPANY shall provide the DISTRIBUTOR at least ninety (90) days notice of any pricing increase. Any price increase shall be limited to ten percent (I 0%) and there shall not be more than one (I) price increase in any given twelve (12) month period.
(c)
The DISTRIBUTOR shall have the right to purchase a minimum of fifty percent (50%) of the production capacity of the COMPANY"s manufacturing capacity, per Product, of the COMPANY's Products.
(d)
DISTRIBUTOR shall have the right to manufacture, assemble or produce the Products itself or through affiliated third parties outside of China, provided however that all proprietary rights relating to the Products including all copyrights, patents, trade secrets, trade names, trademarks and service marks used or promoted by either the COMPANY, the DISTRUBTOR or their respective agents with respect to the Products are the sole and exclusive property of the COMPANY and any such Sub-Manufacturers shall be bound by this Agreement. The COMPANY shall cooperate with the DISTRI BUTOR in establishing any such sub-manufacturing facilities to insure the highest standard of quality control. In the event that the DISTRIBUTOR intends to manufacture the Products elsewhere, it shall inform the COMPANY in writing as soon as practicable and shall pay an annual royalty fee on any sales of the Products manufactured based on the following schedule:
Five percent (5%) of the gross sales up to and including $5,000,000.00 of gross sales;
Four percent (4%) of the gross sales from $5,000,001.00 up to and including $1 0,000,000.00 of gross sales; and
Three percent (3%) of all gross sales over $1 0,000,001.00 of gross sales.
All royalties shall be paid quarterly, in US Dollars. within thirty days of the end of each calendar quarter. In the event that the DISTRIBUTOR is manufacturing,
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assembling or producing the Products as described in this Section 4(d) because the COMPANY is unable or refuses to till purchase orders in a timely manner, the above annual royalty fee does not apply and no annual royalty fees shall be owed or paid to the COMPANY.
(e) The DISTIBUTOR may charge any such price for its sale and/or lease of the Products as the DISTRIBUTOR deems best within the Exclusive Territories.
(f) The COMPANY shall till each and every order presented to it in as timely a manner as is commercially reasonable. The DI STRIBUTOR understands and agrees that in the event the COMPAN Y must manufacture additional inventory in order to till a purchase order presented to it by the DISTRIB U TOR, delivery may be delayed because of time and capital needed to manufacture. The COMPANY may require the DISTRIBUTOR to make a deposit not to exceed one-half of the purchase price of the Products (which deposit shall be credited against the total purchase price of the Products) prior to shipment of the Products needed to till such purchase order.
(g) The COMPANY shall be responsible for shipping logistics on items sent to assembly destinations specified by the DISTRJBUTOR. Shipping costs and any tax and/or tariffs associated with the shipment shall be paid by the DISTRIBUTOR, provided however in an effort to minimize these costs; the DISTRIBUTOR shall have the right to provide to the COMPANY shipping instructions which the COMPANY shall follow in all instances where commercially reasonable. Title to the Products and the risk of loss for the Products sold by the COMPANY shall transfer to the DISTRIBUTOR upon arrival, satisfactory inspection and acceptance of the Products by the DISTRIBUTOR at the assembly destination specified by the DISTIBUTOR.
(h) The COMPANY shall be responsible for all warranty risk under its standard warranties. The COMPANY warrants to the DISTRIBUTOR that the Products shall be delivered with all necessary parts and that all necessary parts shall be in proper working condition.
(i) The COMPANY authorizes the DISTRIBUTOR to perform warranty repairs to the Products. In order for the DISTRIBUTOR to be able to assemble complete units of the Products and to perform warranty repairs to the Products, the COMPANY shall provide, on an ongoing basis, to the DISTRIBUTOR an adequate supply of component parts to expedite assembly of units of the Products that may be received with missing or inoperable parts and to perform warranty repairs. The DISTRIBUTOR shall return or dispose all damaged, broken and/or defective parts to the COMPANY, at the sole discretion of the COMPANY, at DISTRIBUTOR's cost and expense.
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5.
7.
(a) To comply with the annual minimum purchase requirement as described in Section 8(b) below, the minimum annual purchase requirement for the next twelve (12) month period beginning from the Effective Date of this Agreement shall be $1 ,000,000.00 US Dollars.
(b) Should the DISTRIBUTOR fail to make the agreed upon annual minimum purchase requirement, the DISTRIBUTOR shall have two (2) additional months to purchase the balance of the required annual minimum purchase requirement. In the event that the DISTRI BUTOR fails to purchase additional Products to meet the annual minimum purchase requirement, the COMPANY has the right, at its sole discretion, to terminate this Agreement. The DISTRIBUTOR shall be relieved from the annual minimum purchase requirement should there be a Product recall; should the COMPANY fail to meet its obligations in this Agreement; and/or should the COMPANY fail to deliver the Products in a timely manner.
8.
(a) The initial term of this Agreement shall be from the Effective Date of this Agreement until April 30, 2019.
(b) This Agreement shall automatically renew for an additional ten (I 0) years and each I 0 year period thereafter if a minimum increase in sales of ten percent (I 0%) per year or accumulative equivalent or a year by year ten percent (I 0%) increase is achieved by the end of the initial term of this Agreement and each ten (I 0) year period thereafter. The DISTR I BUTOR shall have met its minimum purchase requirement at the end of each year if the accumulative total of purchases is equal to or greater than the amounts added together as shown on the table shown below. All amounts shown below in this Section 8(b) shall be in US Dollars.
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Year | Increase | Minimum |
1 | 0.00% | $1,000,000 |
2 | 10.00% | $1,100,000 |
3 | 10.00% | $1 ,210,000 |
4 | 10.00% | $1,331 ,000 |
5 | 10.00% | $1,464,100 |
6 | 10.00% | $1 ,610,510 |
7 | 10.00% | $1 ,771,561 |
8 | 10.00% | $1,948,717 |
9 | 10.00% | $2,143,589 |
10 | 10.00% | $2,357,948 |
1-10 |
|
$15,937,425 |
11 |
10.00% |
$2,593,743 |
12 | 10.00% | $2,853,1 17 |
13 | 10.00% | $3,138,429 |
14 | 10.00% | $3,452,272 |
15 | 10.00% | $3,797,499 |
16 | 10.00% | $4,177,249 |
17 | 10.00% | $4,594,974 |
18 | 10.00% | $5,054,471 |
19 | 10.00% | $5,559,918 |
20 | 10.00% | $6,115,910 |
1-20
$57,275,007
(c) This Agreement may be terminated at any time by the DISTRIBUTOR, with or without cause, upon ninety (90) days written notice to the COMPANY. The DISTRIBUTOR shall immediately cease representing itself as a distributor of the Products. Each Party shall remain liable under this Agreement for any obligation incurred prior to the effective date of termination. The DISTRIBUTOR shall have the right to sell and/or lease any Products in inventory, the right to purchase Products required to fill any orders it has on the books at the time of termination of this Agreement, and the right to service any leases in effect or arising therefrom untilI the final expiration of any such leases.
(d) This Agreement may be terminated at any time by the COMPANY, but only for cause, upon ninety (90) days written notice to the DISTRIBUTOR of the specific cause the COM PANY asserts is the basis for such termination notice. For purposes of this Section 8(d), "cause" shall mean a material breach of this Agreement, which upon written notice to the DISTRIBUTOR of the specific cause the COMPANY asserts is the basis for such termination notice and the passage of ninety (90) days after receipt of such notice has not been cured. A material breach includes, but is not limited to, failure to meet the annual minimum purchase requirement described in Section 7 above.
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(e) This Agreement may be terminated as to a particular Country within the Exclusive Territories upon the DISTRI BUTOR learning and advising the COMPANY that it is unable to secure any regulatory/governmental approval to distribute the Products within that particular Country in the Exclusive Territories.
(t) This Agreement may be terminated as to a particular Country in the Exclusive Territories if any required regulatory/governmental approval to distribute the Products within a particular Country in the Exclusive Territories is revoked or suspended.
(g) In order for either Party to cu re a material breach of this Agreement, it must pay any reasonable and demonstrable damages such breach caused the non breaching Party.
9.
(a) For the purposes of this Section 9: "Confidential Information" means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as "confidential"). including all information, whether oral or written or in the form of documents, drawings, specifications, data, reports, formulas. manufacturing processes and/or procedures or otherwise, relating to the Products or the operations or assets of any Party and/or the COMPANY except the following: (i) information actually known to a Party prior to its disclosure in connection with this Agreement that is unencumbered by any confidentiality restriction; (ii) information that a Party can demonstrate was available to the general public or that was general industry knowledge at the time of its disclosure to such Party; or which thereafter becomes available to the public or becomes general industry knowledge, without a breach of this Agreement by such Party: (iii) information that a Party can demonstrate was legally furnished to such Party by a third party having the right to so disclose without restriction on its further disclosure; or (i v) information to the extent that a Party may, in the reasonable opinion of its counsel, be compelled by legal requirements to disclose, provided such Party uses all reasonable efforts, and to the extent permitted by applicable legal requirements, will have afforded the other Parties the opportunity, to obtain an appropriate protective order or other satisfactory assurance of confidential treatment, for the information compelled to be disclosed.
(b) Each Party shall keep secret and retain in strictest confidence, and shall not use for the benefit of himself, itself or others except in connection with the performance of his or its obligations under this Agreement, all Confidential In formation of or relating to another Party, and shall not disclose such Confidential Information to any Person other than with the prior written consent of the Party that originally acquired or developed such Confidential Information.
The Parties to this Agreement acknowledge and agree that in the event of breach or non-compliance with any of the provisions of this Section 9,
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monetary damages may not constitute a sufficient remedy. Consequently, in the event of such a breach, the non-breaching Party shall be entitled to Injunctive or other equitable relief, including specific performance, in order to enforce or prevent any violation of such provisions, in addition to any other rights or remedies to which it may be entitled at law or otherwise.
(d)
This Section 9 shall survive the termination of this Agreement.
(a) The DISTRIBUTOR understands and agrees that for the entire
Duration of this Agreement, except as otherwise authorized herein, it shall not manufacture, market, sell or distribute (or assist any other parties to manufacture, market, sell or distribute) any competing product in the Exclusive Territories or in China. Any violation of this Section 10(a) shall be deemed an attempt to circumvent this Agreement, and the DISTRIBUTOR shall be liable for any reasonable and demonstrable damages.
(b) The COMPANY understands and agrees that for the entire duration of this Agreement plus an additional three (3) years after this Agreement expires or is otherwise terminated that it shall not, directly or indirectly circumvent the DISTRI BUTOR to manufacture, market, sell or distribute (or to assist any other parties to manufacture, market, sell or distribute) in the Exclusive Territories. Any violation of this Section 1O(b) shall be deemed to be an attempt to circumvent this Agreement and the COMPANY shall be liable to the DISTRIBUTOR for any reasonable and demonstrable damages.
(c) The COMPANY and/or its affiliates shall not contract, deal with or otherwise become involved in any transaction with any corporation, partnership, individual, bank, trust or lending institution which have been introduced by the DISTRIBUTOR without the prior written consent of the DISTRIBUTOR. Any violation of this Section IO(c) shall be deemed to be an attempt to circumvent this Agreement and the COMPANY shall be liable to the DISTRIBUTOR for any
reasonable and demonstrable damages.
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from and all causes of action, suits, claims, demands, liabilities and/or judgments of any nature whatsoever, arising out of, resulting from and/or relating to any injury, damage to property or person arising out of and/or resulting from the sale and/or lease of the Products by the DISTRIBUTOR only to such extent any such manufacture liability, loss, damage, costs, and expenses including reasonable attorneys fees and costs resulting from and all causes of action, suits, claims, demands, liabilities and/or judgments of any nature whatsoever, arising out of, resulting from and/or relating to any injury, damage to property or person resulted from the remanufacture or any deviation of specifications provided to the DISTRIBUTOR by the COMPANY in the manufacture by the DISTRIBUTOR of the Products.
(a) Arbitration of disputes pursuant to this Section 14(a) shall be held in Las Vegas, Nevada under the commercial arbitration rules of the American Arbitration Association, and shall be heard by three arbitrators selected in accordance with such rules. Each arbitrator shall be chosen from the American Arbitration Association 's Large and Complex Case Panel for the region which includes the State of Nevada at the time of the arbitration, have at least fifteen years experience in the United States as an attorney in private practice or in a corporate legal department and shall not be a past or present officer, director or employee of, or have, or have had in the past, any interest in or material relationship with, any Party or any affiliate of any Party. Any arbitral award shall be in writing in the form of a reasoned opinion, including findings of fact and
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conclusions of law, which law shall be the law of the State of Nevada, and shall be final and binding and may be entered by any Party in any state or federal court having jurisdiction thereof. Costs of arbitration (including reasonable attorney's fees and costs) shall be paid either equally by the Parties to the arbitration or in accordance with the decision of the arbitrators.
(b) The Parties acknowledge and agree that in the event of breach or non-compliance with this Agreement, monetary damages may not constitute a sufficient remedy. Consequently, the non-breaching Party shall be entitled to seek injunctive or other equitable relief, including specific performance, in order to enforce or prevent any violation of such provisions, in addition to any other rights or remedies to which it may be entitled at law or otherwise, and the other Party
shall have the right to oppose any proceeding seeking such injunctive or equitable relief. Such equitable relief shall be available to the Parties after compliance with this Section 14, except injunctive relief pursuant to Section 9, which shall be available to the Parties without the necessity of first using the procedures set forth in this Section 14.
17. Choice of Law and Venue. To the extent pe1mitted by law, the provisions of this Agreement shall govern over all provisions of the laws of the State of Nevada. Otherwise this Agreement shall be governed by the laws of the State of Nevada and the federal law of the United States without reference to principles of conflict of laws. The Parties agree that in the event of a dispute between the Parties arising out of this Agreement or the transactions contemplated herein venue for such dispute shall be in the State or Federal Courts located in Las Vegas, Nevada and the Parties hereby waive any objection to such venue based on forum non conveniens.
OF THIE MEMBERS OR THE COMPANY.
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If to: AGRI-TECHNOLOGIES. LLC
0000 Xxxxxxx Xxxxxxx 00
Xxxxxxxx, XX 00000
Fax:
000.000.000 7
If to: AGRISOLAR SOLUTIONS, INC.
I 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax:
000.000.0000
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All such notices shall be deemed to have been given when received or when delivery is attempted, if acceptance is refused.
26. Interpretati on. Throughout this Agreement, nouns, pronouns and verbs shall be construed as masculine, feminine, neuter. singular or plural, whichever shall be applicable. All references herein to "Sections" and "paragraphs" shall refer to corresponding provisions of this Agreement. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." Any reference in this Agreement to a "day" or number of "days" (without the explicit qualification of "Business'') shall be interpreted as a reference to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice shall be deferred until, or may be taken or given on, the next Business Day.
30.
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Party to the other Parties by facsimile, each of which when so executed and delivered shall be deemed an original and all such counterparts shall together constitute one and the same agreement. If this Agreement or any such document or instrument is delivered by facsimile, the Party so delivering this Agreement or such document or instrument shall within a reasonable time after such facsimile delivery shall also deliver an originally executed copy to the other Party.
AGRI-TECHNOLOGIES, LLC AGRISOLAR SOLUTIONS, INC.
![[exhibit101001.jpg]](https://www.sec.gov/Archives/edgar/data/1379725/000113705011000173/exhibit101001.jpg)
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